Settlement Agreement for a Statutory Director: What Rights Apply to You

Settlement agreement for a statutory director

As a statutory director (statutair bestuurder), you have a special legal position that differs significantly from that of an ordinary employee. If you are faced with a settlement agreement, different rules apply — affording less protection in some respects, but with full entitlement to fair compensation. Understanding what lies ahead for you begins with understanding how your position is structured in law.

The dual legal position of the statutory director

As a statutory director, you hold two roles simultaneously: you are formally appointed as a director of the company and you have an employment contract as an employee. That combination sounds powerful, but in practice it works against you in the event of dismissal. The General Meeting of Shareholders (AVA) or the Supervisory Board can dismiss you under company law on the basis of Article 2:244 of the Dutch Civil Code (in the case of a BV) or Article 2:134 of the Dutch Civil Code (in the case of an NV) — and that decision automatically brings your employment contract down with it.

The Supreme Court confirmed in the so-called '15 April judgments' that terminating the corporate-law relationship also brings the employment-law relationship to an end, unless a statutory prohibition on dismissal applies or the parties have agreed otherwise in writing. In practice, this means that the dismissal protection of a statutory director is considerably more limited than that of an ordinary employee.

No UWV procedure, but a reasonable ground is still required

Unlike the position with an ordinary employee, your employer does not need to seek permission from UWV or commence dissolution proceedings before the subdistrict court in order to dismiss you. The dismissal resolution passed by the General Meeting of Shareholders (GMS) or the Supervisory Board is in principle sufficient to terminate both your position as a statutory director and your employment contract.

That does not mean anything goes. Even in your case, the employer must have a reasonable ground for dismissal within the meaning of Article 7:669(3) of the Dutch Civil Code — think of underperformance, a seriously disrupted working relationship, or economic circumstances. The employer must also investigate whether redeployment to another suitable position within the organisation is possible. In practice, this requirement is readily met, because the directorial role has in effect become devoid of substance once a dismissal resolution has been passed.

The settlement agreement as a way out for both parties

Because litigation is costly and uncertain for both sides, most statutory director dismissals conclude with an amicable arrangement: the settlement agreement. For the employer, this is the quickest route to a fresh start; for you as director, it is the opportunity to use your negotiating room to secure a good exit package.

Bear in mind that the employer holds a psychological advantage during settlement agreement negotiations: it can present the date of the GMS as a hard deadline. If no agreement is reached before that meeting, the employer can simply proceed with the dismissal. Do not be caught off guard by this — even under high pressure, you are entitled to a carefully conducted process.

Procedural requirements for the dismissal resolution

Before the dismissal takes legal effect, the employer must comply with a number of formalities. If these are not followed correctly, you may be able to challenge the dismissal resolution:

• You must be given timely notice of the shareholders' meeting at which the proposed dismissal appears on the agenda.
• As a director, you have the right to cast an advisory vote and to be heard on the proposed resolution.
• You must not be presented with a fait accompli; being heard must carry substantive weight.
• If these rules are not observed, the dismissal resolution may be voidable, with the result that the employment contract revives.

No cooling-off period after signing the settlement agreement

Note one crucial difference from ordinary employees: as a statutory director, you do not have a statutory fourteen-day cooling-off period after signing a settlement agreement. Ordinary employees may withdraw their signature within that period without giving reasons; that protection does not apply to you. Once the settlement agreement has been signed, the arrangements are immediately final and binding. Always have the agreement reviewed by a specialist lawyer before you sign. geen wettelijke bedenktermijn van veertien dagen. Reguliere werknemers mogen binnen die periode zonder opgave van redenen terugkomen op hun handtekening; voor jou geldt die bescherming niet. Is de VSO eenmaal getekend, dan zijn de afspraken direct definitief en bindend. Laat de overeenkomst dus altijd vóóraf controleren door een gespecialiseerde jurist.

Right to a transition payment and fair compensation

Even as a statutory director, you are entitled to the statutory transition payment, unless other arrangements have been set out in writing in your employment contract. As of 1 January 2026, the maximum transition payment is €102,000 gross, or a maximum of one gross annual salary if that amount is higher. In practice, the transition payment in a settlement agreement often serves as a starting point for negotiation: employers are regularly willing to pay more in order to avoid proceedings.

If you are unable to reach an amicable settlement and the general meeting of shareholders (AVA) has pressed ahead with the dismissal decision, you can subsequently claim a fair compensation from the court. This will succeed if the court rules that there was no reasonable ground for dismissal or that your employer acted in a seriously culpable manner. Importantly, reinstatement of the employment contract is excluded by law. You cannot therefore ask the court to take you back into employment.

Unemployment benefit (WW) after a settlement agreement as a director

Whether you are entitled to unemployment benefit (WW) after signing the settlement agreement depends on your shareholding situation. If you have an employment contract with the company and do not hold any shares (or hold only a minority interest that does not allow you to block your own dismissal), you will in principle qualify for unemployment benefit (WW). However, if you qualify as a director-major shareholder (DGA) under the Designation of Director-Major Shareholder Regulations 2016, you are not insured under the employee insurance schemes and are not entitled to unemployment benefit (WW). This distinction is complex and requires early legal advice.

Practical tips if you receive a settlement agreement as a director

• Never sign immediately: as the cooling-off period does not apply to you, it is all the more important to have the settlement agreement thoroughly reviewed before signing.
• Check the procedural steps: were you convened for the meeting in good time and in the correct manner? Were you genuinely given the opportunity to put forward your position?
• Negotiate on the compensation: the transition payment is a statutory minimum, not a final figure. Where the dismissal file is weak, more may be achievable.
• Check your shareholding situation: this will partly determine whether you are entitled to unemployment benefit (WW) after your departure.
• Pay attention to the notice period in the settlement agreement: a period that is too short may delay or cause you to lose your unemployment benefit (WW).
• Request a neutral description of the dismissal: ensure that the reason stated in the settlement agreement is not described as being attributable to fault on your part.
• Report sick before the notice of the general meeting of shareholders (AVA) is issued: a prohibition on dismissal on grounds of illness only applies if you have reported sick before you receive the invitation.

Why Employment Lawyer Eindhoven

At Arbeidsjurist Eindhoven, we have an in-depth understanding of the special position of the statutory director. Whether you are based in Eindhoven, Brabant, or elsewhere: we assess your settlement agreement on all crucial points, from the procedural lawfulness of the dismissal decision to the level of compensation and your unemployment benefit (WW) position. Contact us without obligation — so that you can come to the table with confidence and a well-substantiated position.

Frequently asked questions

Does a statutory director have a cooling-off period after signing a settlement agreement?

No. The statutory cooling-off period of fourteen days that applies to ordinary employees does not apply to the statutory director. Once the settlement agreement has been signed, the arrangements made are binding. Always have the agreement reviewed by a specialist lawyer before signing.

Is a statutory director entitled to a transition payment under a settlement agreement?

Yes, a statutory director is in principle also entitled to the statutory transition payment upon termination of employment at the employer's initiative. As of 1 January 2026, the maximum transition payment is €102,000 gross, or a maximum of one gross annual salary if that is higher. A higher payment can be agreed in a settlement agreement. Unless deviating arrangements have been recorded in writing in the employment contract, the statutory scheme serves as the starting point.

Can a statutory director demand reinstatement of the employment contract if the dismissal was unjustified?

No. The law expressly excludes the court from ordering reinstatement of the employment contract in the case of a statutory director. If there was no reasonable ground for dismissal, or if the employer acted seriously at fault, you can seek a fair compensation from the court. That claim must generally be brought within two months of the end date of the employment contract.

Is a statutory director always entitled to unemployment benefit (WW) after dismissal?

Not automatically. If you have an employment contract and do not hold shares with which you can block your own dismissal, you are in principle eligible for unemployment benefit (WW). However, if you qualify as a director-major shareholder (DGA) under the Designation of Director-Major Shareholder Regulations 2016, you are not insured under the employee insurance schemes and are not entitled to unemployment benefit (WW). Consult a lawyer in good time to have your situation assessed.

What if the general meeting of shareholders did not comply with the procedural rules when taking the dismissal decision?

If the employer failed to follow the procedural requirements — such as not giving timely notice of the shareholders' meeting or depriving you of your right to an advisory vote — the dismissal decision may be voidable. If it is voided, the employment contract revives with retroactive effect. It is therefore essential to seek legal advice as soon as possible if you have any doubts about the lawfulness of the process followed.

We are happy to think along with you. For advice tailored to your situation, we would be glad to talk. No rights can be derived from the content of this page and it may contain inaccuracies.